Page 77 - URA Annual Report 2020-21

(D) Provision for Impairment on Properties and Committed Projects
Based on the accounting policy detailed in Notes 2(h) and 2(n) to the financial statements, provision for impairment on properties and committed projects of $101 million was written back in 2020/21, as a result of the changes in the development plan of some projects and adjustment to the estimated project costs.
(E) Surplus for the Year
For the year 2020/21, the URA recorded a net surplus of $150 million, showing an increase of $32 million as compared to $118 million for 2019/20. The major contributing factors to the increase were (a) higher surplus from a tendered project and (b) the write back of provision for impairment on properties and committed projects during the year.
(II) Financial Position at 31 March 2021 (A) Properties Under Development
Properties under development before provision for impairment of $33,287 million as at 31 March 2021 (31 March 2020: $33,494 million) was maintained at a high level. This sum represented the acquisition and development costs of 15 projects under various states of implementation, out of which Kowloon City Projects and Kwun Tong Town Centre Project accounted for 78% of the total value.
The aforesaid value was off-set against the cumulative provision for impairment totalling $724 million (31 March 2020: $1,221 million), resulting in a net value of $32,563 million (31 March 2020: $32,273 million). The increase in the net value was mainly due to continued acquisition of Kowloon City Projects during 2020/21. It was off-set by (a) Tonkin Street / Fuk Wing Street Project, which was already tendered; and (b) certain projects, including eResidence and Central Market, which construction works were completed during the year.
(B) Total Liquidity
As at 31 March 2021, the URA’s total liquidity, including cash, bank deposits and debt securities investments, was $9,618 million (31 March 2020: $11,067 million).
The URA placed the surplus cash on deposits with a number of financial institutions, and also invested in fixed income products of the required credit rating in accordance with the investment guidelines as approved by the Financial Secretary with capital preservation as the priority.
The liquidity position, off-set by the borrowings of $1,097 million (31 March 2020: $1,796 million) mentioned in paragraph II (C) below, resulted in the net liquidity position including the securities holdings as at 31 March 2021 of $8,521 million (31 March 2020: $9,271 million).
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Management Discussion and Analysis Projects at a Glance Corporate Governance